Tax opponents organize in Macon, Swain

A property transfer tax that could potentially bring nearly a million dollars a year to county coffers is meeting fierce opposition in two Western North Carolina counties where the tax will appear on the November ballot.

Groups have formed in Macon and Swain counties to protest the tax, which would levy a 0.4 percent toll on all real estate transactions. Commissioners in both counties voted to place the property transfer tax — rather than a quarter cent sales tax — on the ballot. Both options were approved by the General Assembly this past summer. With the brisk pace of real estate sales in the mountains, it’s estimated that the tax could bring $800,000 a year to Swain County and $1.5 million a year to Macon.

This money, though, is coming at the expense of just a few people, say opponents of the tax. A major rallying cry of the groups opposing the tax in Macon and Swain is that the tax unfairly targets those buying and selling property rather than the entire population.

“It pinpoints just a few of the people in Macon County to bear all the burden, and it’s not fair,” said Art DeWitt, the chairman of Macon County Citizens Against the Transfer Tax.

“We would prefer the counties not to do either one, but the sales tax would be more across the board rather than targeting one industry or group,” agreed Alan Page, director of Freedom Works, the group behind the opposition in Swain County.

Jim Davis, a commissioner in Macon, defended the county’s unanimous decision to place the tax on the ballot. He said the county wants to target those buying up real estate in the mountains. After all, they’re the ones burdening the county’s infrastructure.

“We have increased infrastructure that’s required, and we’re trying as best we can to place the burden of increased infrastructure on those people that are causing the burden,” Davis said.

“There are people here in Franklin that have lived here for 50 years,” Davis continued. “The water and sewer system is servicing our needs just fine, but the town is faced with increasing water and sewer. Why should the guy that’s been here 50 years pay for that increase?”

Page, though, said the belief that the tax will target outsiders who are placing a burden on infrastructure is a common myth.

“One thing I’ve heard in pretty much all the counties is that (the tax) is only going to affect the outsiders, which is untrue. Everybody says ‘we’ll stick it to the Floridians,’ but you’ll find most of your land transfers are between residents in the county,” Page said.

Will money materialize?

In Macon County, proceeds from the land transfer tax will go into the general fund as revenue for county services like new schools, a new EMS building, library facilities — basically, “all the stuff government is required to provide,” Davis said.

But DeWitt and the Macon County Citizens Against the Transfer Tax question whether the government needs the extra money.

“Macon County doesn’t need any more funding — they’ve got money,” said DeWitt.

DeWitt says the extra money, if needed, for infrastructure, will be provided by the county’s growth. In other words, the county doesn’t need to tax the homebuyers that are making the county grow — the money needed for new infrastructure will already be coming from them.

“People talk about growth. Growth in itself provides extra income through taxes,” said DeWitt.

In Swain County, proceeds from the land transfer tax will fund the construction and improvement of schools — something the community desperately needs, say supporters of the tax.

“It’s an evident fact that we’re going to have to build a school in the future in Swain County, and this is one option to raise some money for the school system,” said Commissioner Steve Moon.

When asked how difficult it was to obtain funding for schools, Moon said it wasn’t hard. He reconsidered after a moment, however.

“Sometimes it can be, depending on the amount of money you need. This is going to take a large amount,” Moon said. The county needs to address overcrowding in its elementary schools and wants to build a new junior high.

Page, though, doubts the land transfer tax will give the county the money it needs to fund school improvements.

“If you remember, it was told to the folks in North Carolina that the lottery was going to cure all our ills on funding for education,” he said.

Page said when the issue of school funding came up in relation to the land transfer tax, it was found that the tax would not make the revenue projections needed to fund schools.

Furthermore, Page added, the land transfer tax isn’t consistent enough to rely on for school funding.

“It’s not a stable source of revenue for county commissioners from year to year. The housing market and home sales fluctuate,” Page said.

Educating voters

The Swain opposition group has another argument against the land transfer tax: voters aren’t aware of what it is.

“If the county commissioners wanted to find out what the county really feels about this issue, they would put it in the May or November ballots of next year,” Page said. Traditionally, off-year elections like the one this Nov. 6 attract the lowest voter turnout.

“If you went and polled the citizens of Swain County, you’d probably only find 10 percent who even know it’s on the ballot. We think it’s unfair how they’re trying to sneak this through the backdoor and keep people sleeping. If you live outside the town, you probably wouldn’t even know about this,” Page said.

To educate voters, the Freedom Works group will distribute fliers, plaster bumper stickers, call citizens and write letters to the editor at various newspapers. The Swain and Macon opposition groups will both host forums with a speaker from the conservative John Locke Foundation who will talk about the land transfer tax. These efforts will step up from now until the Nov. 6 election — all in the hope that the land transfer tax won’t become a reality.